SanDisk (SNDK) Stock Pummeled After Revenue Guidance Cut
Shares of the SanDisk (SNDK) Corporation were off -11.69 or -14.38 percent to $69.50 in Thursday's premarket after the company downwardly revised its revenue guidance for the company's first fiscal quarter. SanDisk stock closed at $81.17, down -3.57 or -4.22 percent in Wednesday's regular trading session.
Milpitas, California based SanDisk Corporation is an American/Israeli company founded in 1988 by Sanjay Mehrotra, Jack Yuan and Eli Harari, three specialists in non-volatile memory technology.
In a press release this morning, SanDisk announced that revenue for the company's first quarter, which concluded on March 31st, 2015 will be approximately $1.3 billion depending on the company's final sell through results, which could be adjusted or changed after a normal quarter end accounting review. SanDisk had previously forecast that first quarter revenue would be in a range of $1.4 billion to $1.45 billion. Analysts expected the company's guidance for its first quarter to be $1.43B.
Sanjay Mehrotra, SanDisk's President and Chief Executive Officer said that, "We are disappointed with our financial outlook; we will work through these headwinds, leveraging our compelling product roadmap and broadening customer base. We believe our growth prospects remain strong and we are encouraged by the progress we are making in our 3D NAND technology.
The company cited lower than expected sales of enterprise products and lower pricing for some areas of its business, as well as certain product qualification delays as the main reasons for the adjustment in revenue guidance. SanDisk said that it expects its 2015 financial results will continue to be impacted by these factors and other previously identified supply challenges.
SanDisk withdrew all other forecasts for the quarter and for the full year and will provide an update after announcing first quarter earnings on an earnings conference call on April 15th, 2015. The company will also reschedule its previously announced May 2015 Investor Day to a later date.
In addition to the revenue guidance revision, SanDisk announced this morning that it had successfully developed a 48 layer second generation 3D NAND flash memory, also known as BiCS2. SanDisk will begin pilot production of the components in the second half of this year at the company's and Toshiba's Yokkaichi joint venture facility with commercial production targeted for 2016.
Dr. Siva Sivaram, SanDisk Executive Vice President for memory technology stated that, "We are very pleased to announce our second generation 3D NAND, which is a 48 layer architecture developed with our partner Toshiba; we utilized our first generation 3D NAND technology as a learning vehicle, enabling us to develop our commercial second generation 3D NAND, which we believe will deliver compelling storage solutions for our customers."
SanDisk investors are selling the stock aggressively in this morning's premarket despite the announcement of the new 3D NAND. The stock is already trading below its previous yearly low of $71.11 and could continue lower as the trading day progresses.
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